Today U.S. Republican Presidential candidate Mitt Romney fired back at critics of his plan to spin-off America’s largest state by area into a private investment vehicle run by large multinational corporations, saying in an interview on Fox News that the county needed “bold, private sector solutions” to its pressing fiscal problems
News of the confidential plan to strip Alaska of its sovereignty and sell it to the highest bidder leaked to the press this week when a key Romney aide accidentally emailed a campaign white paper entitled “Alaska: 50 Million Shades of Gold” to a journalist working for the Anchorage Daily News.
The document revealed a highly detailed plan to eject the 49th state from the union and spin it off into a Special Purpose Vehicle called the Alaska Resource Opportunities Fund (AROF).
Under the proposal all public and private land in the state with the exception of military bases would be signed over to the new Cayman Islands based AROF, whose managers would be given free reign to develop the state’s resources with zero interference from job-killing federal environmental and labor laws.
North to the Future
“The idea is to create a sort of Dubai-on-the-Matanuska.”
Shares of the new fund will be sold to major institutional investors around the world, who stand to profit from the explosion of revenues from mining licences and royalties that will result from at complete lack of government restraints on mining, drilling and other extractive industries.
Citizens of the state would lose their American citizenship, and instead by declared citizens of the Alaskan Authority (AA), an internationally recognized paragovernmental organization owned and operated by AROF. The AA will have an open immigration policy allowing any worker from anywhere in the world to come to Alaska and work in the new mining bonanza, which should drive down average wages for hourly workers to nearly zero.
The entire state will be governed by a manager appointed by AROF’s board, which will be elected by its voting shareholders.
The federal government will carry a non-voting 40% stake in the venture, and also hold preferred shares paying 4.5% a year.
According to the document the initial sale of 60% of the state to private investors is expected to yield 5 trillion dollars, a sum representing 1/3 of the U.S. total stock of debt. The remaining 40% stake could be worth even more if the venture is successful in creating value.
One Romeny advisor who helped craft the plan explains its genesis, “The idea is to create a sort of Dubai-on-the-Matanuska. Lots of stateless foreign workers. No taxes. No government regulation. The whole thing is a public-private partnership, and U.S. taxpayers participate in the upside.”
Reaction to the plan has been universally negative, with commentators pointing out that it is severely unconstitutional to sell an entire state to a private entity. Environmental activists are outraged that all of the state’s environmental protection laws will be thrown out. And labor activists are up in arms about the provisions outlawing unions..
Libertarians in the state are excited about eliminating the state government, but slightly concerned about the effects of being owned by a private corporation.
In his interview, however, Romeny defended his ideas from the barrage of criticism:
“Look people. Calm the fudge down. This is what I do. I make money. The government needs money, I know how to get it. Do we want to be a country that whines about democracy this or consitution that…blah…blah…blah? Or do we want to be a country with a solid balance sheet? I’ll let the voters decide.”
Although economists agree that the state indeed does have enormous untapped environmental resources – including hundreds of billions of dollars worth of oil, natural gas, timber, gold, and iorn ore – they are skeptical that turning an entire state into a private company is a good idea.
“There’s no doubt this plan would make trillions of dollars. But I’m not sure if selling bits and pieces of ourselves is the right way to trim the deficit. Maybe it would just be easier to raise taxes on high-earners by like 4%,” says David Attleberg, a professor of economics at Princeton University in New Jersey.
Whatever the policy merits of the proposal, some observers also see an added political advantage to the measure. A seasoned political analyst explains:
“Selling Sarah Palin into corporate slavery would really draw a line under that whole embarrassing 2008 mess and allow the party to move forward. If he frames this as a way to get rid of Palin, it might stand a chance in the other 49 states.”